Option backdating statistics singles dating blog de
Therefore, if executives backdate the excercise date of an option to a day (from at least a year ago) when the stock's price was at a low, they can potentially cut the amount of taxes that they pay by as much as 50%.For example, suppose that yesterday an executive backdated some options to when the underlying stock was .00 (the low for the last 1.5 years ).
The tax code lowers the capital gains tax rate if the executive does not sell the granted shares for a year (to around 15%).
The Securities and Exchange Commission and the Justice Department investigated more than 100 companies.
Internal investigations by companies led to scores of financial restatements and dozens of executive dismissals.
''I don't have any doubt the jury's verdict was correct,'' Judge Rakoff said at sentencing. ''I never expected my study would lead to anything,'' Professor Lie said. About 150 companies issued restatements because of allegations of backdating stock options, a list that included Apple and Cablevision.
''It is appalling; it is disgusting that this practice went on.'' Mr. The backdating scandal was set off in 2005 after Erik Lie, a finance professor at the University of Iowa, published a study that showed an uncanny number of cases where companies granted stock options to executives right before a sharp increase in their stocks. ''At the time we published the paper, it wasn't clear that regulators would view the activity as illegal.'' That was a major challenge for prosecutors in these cases: The practice, which involved complex accounting, disclosure and tax issues, was not necessarily illegal. In a study published last year, Professor Lie and a colleague concluded that about 29 percent of American businesses, more than 2,000 companies, that made stock-option grants to executives from 1996 through 2005 had manipulated them. Karatz to five years probation, rejecting the government's request to send him to prison for six and a half years.
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After accounting for the 35% captial gains taxes, net proceeds will be around $32,500.